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  • ANALYSIS: …and the central bank heading for single-digits

    Given the positive market sentiment, the current 75 basis points rate cut is not to have a significant negative impact on TL; yet that is just the current environment. Looking forward, with Turkey in the centre of geopolitical tensions, with the rigidity of inflation, the persisting credibility problems and the level of dollarisation in the country; negative real returns are designated to add to market volatility and more importantly to financial stability. 

  • Finally: Turkey lifts Wikipedia ban

    Turkish authorities have opened access to Wikipedia after a Constitutional Court verdict ordering to lift a more than two year…

  • Turkey’s weak growth comes at a cost of a large fiscal deficit

    The country's economic program, announced last September, aims to keep the budget-deficit-to-GDP ratio at 2.9% in 2019, 2020, and 2021. Looking at the 2019 performance and how the AKP administration tapped the central bank resources, it would be tough for the government to meet those targets when GDP growth is expected to remain below the 5% target.  More importantly, with the budget deficit to GDP ratio soaring to 3.2% from the previous year's 1.9%, it becomes evident that the cost of creating postie growth has increased to a sizable extent as Turkey fails to attract meaningful investments from both domestic and external resources amidst lack of credibility. 

  • What does the November industrial production suggest for Turkey’s GDP growth path?

    Given that the central bank of Turkey is left few little room for further rate cuts following the 1200 basis points it delivered during July-December 2019; such a rebound seems unlikely.  All combined assuming 5.0% GDP growth for 1H20 and 3.5% for 2H20; 4-4.5% GDP growth for the whole of 2020 appears more probable. The real trouble in reaching the 5.0% GDP growth target will get even more tangible in 2021 as the base year would have become normalized in 2020.       

  • Turkey and Libya:  The General walks off the table

    Khalifa Hafter, leader of the forces attacking the Libyan capital Tripoli, left Moscow today without signing the  long term peace deal proposed by Russia and Turkey.  Turkey will teach military commander Khalifa Haftar “a lesson” should his forces continue their attacks on Libya’s internationally-recognized government led by Prime Minister Fayez al-Sarraj, President Recep Tayyip Erdogan tells lawmakers

  • Rate cut week again?

    The revival of fund flows to emerging markets amidst the pause in Fed's policy actions, the ease in US-Iran tension and now the ceasefire in Libya are all factors combine to create positive mood on lira performance; creating room for further easing by the central bank. Perhaps to a tune of 100 basis point, in a front loaded manner.   

  • Current account: Back to deficit days but deficit is set to remain weak as growth is weak

    Given the government's heavy policy support-  both fiscal and monetary- to revive domestic demand; in the coming months we will witness the current account deficit deteriorating further along with a slight increase in energy costs. Thus, by the end of 2020, Turkey's current account balance will once again be in the red to a tune of 2.2-2.5% of GDP compared to an estimated surplus of 0.3% of GDP at the end of 2019.  

  • Equity Strategy for 2020:  Time for Turkish underperformance to end

    Turkey’s top non-bank financial services company Unlu Co’s research team predicts strong equity rally in 2020

  • Erdoğan-Putin Deal Tests Russian, Turkish Influence in Libya

    The two strongmen announce a ceasefire, but they are not the only ones with an interest in Libya.

  • Turkey October unemployment rate rises to 13.4%

    The October 2019 employment details reflect a wide range of deterioration, showing the government pushed economic recovery has not- yet- stimulated job growth. 

  • Turk Stream not a panacea for growing disputes between Turkey and Russia

    As Presidents Erdogan and Putin gather to christian Turk Stream NG pipeline, there were smiles all around, as well grandiose promises of boosting bi-lateral trade to $100 bn per annum.  Mr. Putin’s smile must be genuine, because he is getting the best of a “strategic alliance” which provides significant economic and diplomatic benefits to Russia, but little to Turkey

  • Turkey:  The fallout from US-Iran tensions

    A cordial rival to Iran, and having troubled relations with US, Turkey finds itself in the midst of a maelstrom not of its own doing. The official view of neutrality is not feasible.  The diplomatic and economic fallout will rise exponentially, if tensions escalate further

  • State banks help steady Turkish lira despite oil jump

    "The state (banks) are in the market on the forex supply side today too, as they were on Friday," one trader said. "It is difficult to say how many dollars are being sold but it's clear they will not allow an excessive loss in the lira's value."

  • TRT World:  Assad’s Idlib offensive could suspend Russia-Turkey cooperation

    With regime forces renewing attacks on rebel-held Idlib in northern Syria, the pact between Ankara and Moscow to build peace in the region is constantly being violated, putting an enormous strain on their bilateral ties

  • CBT tweaks policy as lira heads towards 6.00 vs. the dollar

    We have long held the view that USD-TRY would rise sharply during the next EM risk off episode – the reason for such a view is the asymmetric reaction function of the central bank, which can only cut rates but not hike them